After a wild and crazy month filled with Greece, China and other concerns, U.S. stock indexes finished higher across the board.

Bloomberg

The S&P 500 gained 2% to 2,103.92 this month after dropping 0.2% today, while the Dow Jones Industrial Average ticked up 0.4% to 17,690.46 in July after falling 0.3% today. The Nasdaq Composite jumped 2.8% to 5,128.28 this month after ending today little changed.

One of the more consistent beginnings to most of our client meetings tends to be “so what are you hearing from others on the Street?” In essence, fund managers want to know what other investment professionals are focused on, to make sure that they are in the loop and maybe there’s something that should be considered that they have missed. In this context, it is a useful exercise to occasionally review what issues we face the most when talking with institutional investors and there’s been a notable change recently from discussions around Greece and, to some degree, Chinese equities of late towards several other frequently asked questions (or FAQs).

To be clear, we remain committed to our 15-20 year secular bull market thesis for US stocks, alongside our theme that global growth will be defined by North America – not by emerging markets. Frankly, our theories remain widely doubted, as many investors continue to emphasize the last trade and prior cycle – namely strategies driven by quantitative easing, commodities, credit, and low quality. Given the recent upheaval in China coupled with the ambiguity in Europe, we believe the consistent – albeit lackluster – returns in the US year-to-date are once again not being appreciated. This time, stay home.

After a week like this, that’s what I plan to do. I’m off all next week–I’ll see you when I return.

Shares of Coca-Cola Enterprises (CCE) have soared more than 12% today on reports that it is considering a purchase of two other Coca-Cola bottlers, Coca-Cola Iberian Partners and Coca-ColaErfrischungsgetränke AG. SterneAgee CRT’s April Scee explains why a deal would be good news for Coca-Cola (KO):

Bloomberg New

After the market close today, the WSJ reported that Coca-Cola Enterprises is in advanced talks to merge with two other Coke bottlers in Europe: privately held Coca-Cola Iberian Partners (i.e., Portugal and Spain) and Coca Cola-owned Coca-Cola Erfrischungsgetränke AG (i.e., Germany). Coca-Cola Enterprises’ territories currently include Great Britain, France, Netherlands, Belgium, Luxembourg, Norway, and Sweden. If true, this is positive for Coca-Cola and follows its strategy to (i) divest company- owned international bottling operations after these have been fixed, and (ii) merge smaller overseas bottlers into bigger, more efficient operations.

Maintain Buy. We believe carbonated soft drinks are becoming less of an issue, cost-cutting targets likely underestimate potential and refranchising initiative could speed up (and, as a cherry on top, Coke could continue making strategic investments in fast- growing beverage companies).

Coca-Cola Enterprises has jumped 12% to $51.00 at 3:22 p.m. today, while Coca-Cola has risen 1.3% to $41.10.

ExxonMobil 2Q15 adjusted EPS of $0.88/share was well below consensus and Citi estimates. Upstream results were lower than expected, with both volumes and margins below estimates. US Upstream was particularly weak due in large part to low natural gas price realization. Upstream was also impacted by a $260m charge from the Alberta corporate tax change. Downstream was also lower, impacted by planned turnarounds and continued outage of Torrance…

ExxonMobil is now one of the few within Big Oil not to announce firm cost reduction targets. The company’s robust balance sheet can sustain shareholder returns for an extended period, but we believe it must also address costs strongly to recover results in a “lower for longer” environment.

Barclays analyst Darrin Peller explains why he upgraded Western Union (WU) to Equal Weight from Underweight following today’s earnings announcement–and why he still has reservations about the stock:

Andrew Hinderaker for The Wall Street Journal

Raising our rating to Equal Weight: On the basis of stable pricing and transaction growth trends in the C2C business, improving revenue growth prospects for the C2B segment, and lower risk of incremental compliance spend on top of current investment levels (~3.5%-4% of annual revenues), we see mid-single digits constant currency revenue growth and flat to improving margins as achievable. When combined with share buybacks and a dividend yield of ~3%, we see total shareholder returns at mid to high single-digit levels for 2016. In addition, we note that 2016E EPS growth could have potentially reached the low double-digit range after backing out the YTD ~$35mn FX hedge benefit in 2015 and the expected ~200bp increase in the tax rate (the ~13% tax rate is expected to return to a more normalized mid-teens rate in 2016), and see the company as warranting a valuation closer to the market multiple.

However, we still see several notable risks to the overall story like: 1) PayPal (PYPL)/Xoom’s (XOOM) growing competitive presence over the next few years; 2) online cannibalization of the off-line business at lower margins; and 3) challenges to EPS growth from unforeseen incremental investments (i.e. compliance, technology, and employee incentive costs), and more. As a result of our improved outlook, which is offset by these risks, we raise our multiple one turn to ~13x and our 2016 EPS estimate to $1.71 from $1.67 to reach a new price target of $22. We raise our rating to Equal Weight from Underweight.

Wolfe Research’s Hunter Keay and team contend airlines stocks–including American Airlines (AAL), Delta Air Lines (DAL) and United Continental (UAL)–will either get a boost from better passenger revenue metrics or increased share buybacks. They explain why:

Associated Press

We believe investors don’t really care about share buybacks… yet. And that’s totally understandable given the buybacks we’ve seen so far and the recent announcements have been generally modest in size. And even the big announcements are being perceived as unsustainable as they’re being funded partly by fuel. We see the rest of 2H15 following one of two likely paths: oil prices go up and [passenger revenue per available seat mile, or PRASM,] gets better, or oil prices stay low, PRASM stays bad (but gets less worse), and cash flow and margins are sustained. We’re ok with either one. We believe we’re on the precipice of a period of cash flow hell being unleashed by airlines, mainly American Airlines, Delta, and United Continental but also Alaska Air (ALK) and maybe Southwest Airlines (LUV), on their own share counts via ramped up buybacks. We think most C- level airline executives aren’t losing a ton of sleep these days if investors want to trade their stocks at deeply discounted multiples during periods of record earnings, because it simply allows airlines to buy what they believe are solid long term stories at a sale price. And we get that, and we think most investors get that, too.

Here’s a secret: PRASM doesn’t have to get better for airline stocks to work. It just has to beat expectations. We believe airline stocks have performed poorly this year because nearly all airlines except Spirit Airlines (SAVE) told investors late last year that fares would not come down as fuel came down. Most chalked that up to a personal problem for Spirit. Published estimates were too high (ours too, by the way), PRASM bled out slowly over 1H15, and astute hedge funds shorted stocks into downward revisions and estimate cuts. It’s fairly basic. American Airlines just set the bar real low for PRASM last week, saying industry PRASM wouldn’t inflect positive until 2H16. Some investors thought that was a bad thing. It was not. American preemptively repaired potential future damage inflicted by other airlines that provided more optimistic 2H15 PRASM commentary that, in our opinion, was seemingly based on hope.

Shares of American Airlines have dropped 0.5% to $40.08 at 2:39 p.m. today, while Delta Air Lines has advanced 0.4% to $44.21, United Continental has fallen 0.5% to $56.58, Southwest Airlines has declined 0.5% to $36.12, Alaska Air has risen 0.5% to $75.54, and Spirit Airlines is up 0.5% at $60.02.

Shares of Goldcorp (GG) are shining today–they’re up more than double the Market Vectors Gold Miners ETF’s (GDX) gain today–as the market looks to have absorbed the shock of yesterday’s dividend cut. Credit Suisse analsyt Anita Soni and team explain why Goldcorp deserves to trade at a premium to its peers, which I assume includes Newmont Mining (NEM) and Barrick Gold (ABX):

Reuters

We continue to believe Goldcorp should trade at a premium to peers due to its less leveraged balance sheet and newer mines, which result in a more sustainable production profile and the potential for cash flow growth in a flat gold price environment. Goldcorp trades at 0.93x our NAV estimate vs. peers at 1.01x…

Guidance improved, production expected at top end, AISC reduced $38/oz at the mid-point: Production now expected at the top end of 3.3-3.6Moz due to higher grades at Penasquito and a strong ramp up at Cerro Negro, offsetting a slower than planned ramp at Eleonore. CS estimates the AISC reduction to $850-$900/oz is attributable to Penasquito…

Dividend reduced by 60% to $0.24/year: In-line with our estimate for a 40-80% reduction and representing an ~$200M/year payout. CS estimated in a July 5th report $350M in pre-dividend FCF in 2016 at $1,100/oz.

Goldcorp reported a very strong operating quarter, growing production by ~25% in Q2 and setting itself up nicely to meet full year guidance. Goldcorp itself is now indicating that it expects to reach the top end of its gold production guidance range. This development in Q2 removes a very significant overhang from the stock in our opinion as after a weak Q1, investor concerns had centered on the possibility of GG missing guidance in 2015. In addition to removing production miss risk, Goldcorp also reduced its AISC guidance for the full year as strong operations and beneficial forex movements have kept costs lower than expected. The positive operating news was offset by the 60% dividend reduction announced in the quarter, however, we believe the previous dividend level was unsustainable in the current gold price environment and should not have been a surprise. As such, moving past the quarter, we continue to prefer Goldcorp as a relative pick in the gold sector and especially at lower gold prices as we believe its return to meeting operating expectations, the continued ramp-ups at Cerro Negro and Eleonore and its safe balance sheet will garner fund flows into the stock and away from gold equities with more operating and financial leverage.

Shares of Goldcorp have jumped 5.9% to $13.35 at 2:08 p.m. today, while the Market Vectors Gold Miners ETF has risen 2.9% to $13.85. Newmont Mining has dipped 0.2% to $17.25, and Barrick Gold is off 1% at $6.98.

We cut our 12-month target by $29 to $96 on our lower forward cash flow multiple, reflecting our view of elevated risk for Chevron to meet its stated targets. Chevron affirmed its focus on protecting its record of annual dividend growth, and covering its ’17 dividend with free cash flow. We think Chevron can get there, but likely with the trade-off of more significantly lowering capex beyond already planned cuts and/or with enhanced asset sales. We see this imperiling the stated ’17 production target. Near-term, we see Chevron as cash flow negative in ’15, and barely positive in ’16.

Cantor Fitzgerald’s Brad Carpenter sees “some interesting opportunities for those willing to step in and take a longer term view on the space,” with his top picks including Buy-rated Carrizo Oiland Gas (CRZO), Bill Barrett Corp (BBG), and PDC Energy (PDCE). He explains why:

Daniel Acker/Bloomberg News

Overall, we believe investor sentiment on the group has yet to come around, as most are not quite comfortable with the macro environment. We do not foresee most generalists stepping into the space until crude finds a bottom. While our forecast is slightly above the West Texas Intermediate (WTI) strip, we are less-bullish than Street consensus (per Bloomberg) on crude until 2017, when we are more/less in-line. Shorter term, we believe the group is likely to remain volatile and move with the macro. However, our price deck shows some interesting opportunities for those willing to step in and take a longer term view on the space. Criteria for our BUY ratings generally include: healthy balance sheet/liquidity (taking upcoming redeterminations into account); deep, economic inventory; valuation; and, operational flexibility.

There’s been some concern that China’s stock market collapse could weigh on shares of luxury retailer Tiffany (TIF). Oppenheimer’s Brian Nagel and Dan Farrell argue that Tiffany will be just fine:

Recent volatility in Chinese stock markets has unnerved investors across the globe and renewed concerns of underlying economic weakness in China.

Sales in greater China Asia Pacific account for about 24% of total revenues for Tiffany, with sales in Greater China accounting for about half that, while sales to Chinese tourists serve as a leading driver of top-line growth in markets such as New York, San Francisco, and Paris.

While we are by no means experts in Chinese stocks or economic conditions in China, we nonetheless keep a close eye on indications of economic shifts in China and any impacts upon sales trends at Tiffany. Tiffany demonstrates time and again that sales trends at its stores in China or its appeal with Chinese consumers elsewhere is far less impacted by broad-based macro or market trends…

[Over] time sales at Tiffany stores in China have a seemingly limited correlation with shifts in Chinese stock markets. Most recently, we see no evidence that the substantial move higher and subsequent retrenchment in Chinese stocks impacted sales trends at Tiffany.

Nagel and Farrell raised their target on Tiffany to $110 from $98. Tiffany has gained 0.8% to $95.80 at 11:58 a.m. today, leaving 15% of upside to their target.

Organic growth is tepid and shares pressured in several categories and countries as it works behind the scenes to emerge a smaller, faster growing and more profitable enterprise with roughly 90% of sales and 95% of profit concentrated in 10 categories and 15 countries. Moreover, $10B+ restructuring program and focus on biggest countries and categories where they have a right to win should provide growth and profitability cushion, especially if macro stabilizes. While transition period will be bumpy and confusing as we saw today, upside thesis predicated on better and smarter execution once the dust settles…

CEO designate David Taylor has wood to chop, especially in important markets like China were shares are pressured, driving total company organic growth well below peers. Moreover, following the portfolio overhaul and boosted by massive restructuring program, Taylor also has to prove the company can get out of its multi-year funk where EPS has hovered in a 10% range around $4.00 since FY08. To win, P&G needs to drive categories from the top via premium innovation (like Tide Pods) and ensure it has the right products in the right markets (like pull-up infant diapers and faster migration to liquid laundry detergents in developing markets) as we discuss in this report.

Schmitz and Alwy maintained their Buy rating on shares of Procter & Gamble, and their $90 price target.

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.